The Hang Seng Index continued its five-week winning streak, gaining a robust 7.04%, marking its best weekly performance since October. Optimism around potential Federal Reserve rate cuts and the buzz surrounding DeepSeek’s AI advancements were driving forces behind this remarkable rally.
The tech sector experienced significant momentum, with the Hang Seng Technology Index advancing 7.3%. Notable gains were seen in major tech giants like Alibaba Group Holdings Ltd. (9988), soaring 24.10%, Tencent (0700) growing by 10.55%, and Baidu (9888) rising 11.94%.
Mainland Chinese markets also saw modest gains, with the Shanghai Composite climbing 1.30% and the CSI 300 rising 1.19%. These gains were largely influenced by positive developments in US-China trade policies and advancements in the global AI landscape, while remaining relatively unswayed by US Federal Reserve policy expectations.
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Commodities: Gold Rockets Past $3,000, Iron Ore Weakens
Last week brought mixed results for the commodities sector, culminating on February 14.
- Gold extended its seven-week win streak, climbing 0.79% to $2,883 and breaking a record high of $2,943 before a slight decline.
- Iron ore spot prices dipped 3.14% to $788.11, amid lingering doubts about trade policies between the US and China.
- Crude oil prices fell despite temporary relief from tariff delays, attributed to rising US inventories, potential end of the Ukraine war, and ongoing tit-for-tat US tariff threats.
ASX 200 Surges to New High, Boosted by Banking and Gold Stocks
The Australian Securities Exchange (ASX) 200 index climbed 0.52% to establish a new record high. Banking, gold, and technology stocks were at the forefront of this bullish performance.
- Northern Star Resources (NST) surged 4.68%, closely following gold price movements.
- The Commonwealth Bank of Australia (CBA) grew 1.70% after reporting better-than-expected profits, underpinned by a significant reduction in loan impairment charges.
- Westpac Banking Corp. (WBC) finished the week up 1.97%, benefiting from lower US Treasury yields, which intensified demand for high-yielding Australian banks.
Nikkei Index Advances, Supported by a Weakening Yen
The Nikkei Index rose 0.62% for the week, bolstered by the USD/JPY pair advancing 0.59% to 152.282. Despite indications of a possible second Bank of Japan rate hike in H1 2025, the Yen weakened against the US Dollar.
Additional support came from Japan’s producer prices, increasing 4.2% year-over-year in January, up from 3.9% in December, indicating stronger demand.
Market Outlook: Key Events to Watch
The upcoming week holds critical implications for Asian markets, with key focus on US trade policies, geopolitical developments, and economic data.
- Any progress toward resolving the Ukraine conflict or easing trade war concerns could significantly enhance risk appetites.
- Decision outcomes from the Reserve Bank of Australia and potential economic stimulus from Beijing will shape market dynamics.
- Japanese economic data will influence speculation on Bank of Japan rate hikes, potentially impacting the Yen and export-linked stocks.
Market enthusiasts should stay vigilant regarding global economic trends to navigate and capitalize on shifting market conditions.
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